SNAP - Snap Inc.
| Previous Close | 16.16 |
| Open | 16.30 |
| Bid | 0.00 x 1300 |
| Ask | 16.35 x 1000 |
| Day's Range | 15.97 - 16.34 |
| 52 Week Range | 4.82 - 18.36 |
| Volume | 15,583,232 |
| Avg. Volume | 30,074,720 |
| Market Cap | 22.262B |
| Beta (3Y Monthly) | 1.09 |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -0.81 |
| Earnings Date | Oct 23, 2019 - Oct 28, 2019 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | 16.32 |
- InvestorPlace
Why the Roku Stock Price Needs to Pull Back
Roku (NASDAQ:ROKU) unquestionably has had an incredible 2019. Earnings continue to beat expectations. Growth has impressed. The ROKU stock price has soared, climbing 348% to this point. Among stocks with a market capitalization over $4 billion, not one has come close. Snap (NYSE:SNAP) is in second place, with a paltry-by-comparison 184% gain.Source: jejim / Shutterstock.com Even after those gains, ROKU stock looks reasonably cheap -- at least by the standards of this tech market. The midpoint of revenue guidance for 2019 suggests a roughly 14x enterprise value/revenue multiple. In a market where Shopify (NYSE:SHOP) is getting 25x+ and double-digit EV/sales multiples aren't uncommon, that figure isn't necessarily out of line.With Roku's pole position among cord-cutting and international possibilities, that type of multiple seems merited. But I'm no longer sure that's the case. The issue isn't necessarily the headline multiple. Investors mostly have done well by paying up for growth in this market. It's that, looking closer, Roku's current valuation for several reasons looks highly questionable -- even if, admittedly, I've made that argument before.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Player Revenue Shouldn't Count for the ROKU Stock PriceAgain, 14x revenue isn't that crazy in this market, even if that statement alone makes some investors wonder if the entire market has gone crazy at this point. But it's important to remember, as I've noted before, that not all of Roku's revenue is worth paying up for.The company's guidance, updated after this month's second-quarter earnings report, is for revenue of $1.1 billion at the midpoint. But roughly one-third of those sales are coming from Roku players -- which are actually unprofitable. * 10 Undervalued Stocks With Breakout Potential Player gross margin in the second quarter was just 5.5%. Gross profit dollars for players over the past four quarters total just $23 million -- suggesting 6.5% gross margins. Given that research and development spending alone has been over $200 million during that stretch, the player business obviously is a loss leader for the company's platform business.And that's fine. Platform revenue is growing at an exponential rate: 79% year-over-year in Q1 and 86% in Q2. But investors shouldn't be paying 14x revenue -- or really, anything, for the player revenue.Back out those hardware sales, and the ROKU stock price now sits above 20x this year's revenue. That is a multiple that, on its face, looks questionable. It's a multiple assigned to companies that have the potential for dominance of their market. Roku isn't necessarily one of those companies, at least not yet. The Market Share QuestionWhat's interesting about Roku is that it's driving growth while facing competition from absolute giants. This is a company going directly against Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) -- three of the four most valuable companies in the world. It has leading market share in terms of streaming devices in use.But it's still a relatively fragmented market. And in smart TVs, which is where Roku management itself believes streaming is going to go, its share in the first half of this year was "more than one in three," according to the shareholder letter.To be sure, Roku may be able to take share over time. More users means more data, which combined with the company's machine learning capabilities improves the experience. The Roku Channel increasingly looks like a gateway to streaming. It also looks like a business in which Roku can take dollars from streaming services, take dollars from advertisers and potentially take eyeballs (and maybe at some point dollars) through its own content.Still, Roku seems potentially unlikely to ever truly dominate the space. Competition is always going to be a factor -- and those larger rivals can find a way to undercut on pricing for streaming services and for advertisers. At 20x+ platform revenue, an investor should at least think she's buying the clear winner in an industry. That's not yet guaranteed to be the case. Where Does Streaming Go?The broader question is that this remains an industry still in the early stages -- which means Roku's long-term role in the ecosystem may change over time. Right now, there are dozens of streaming services of all sizes -- with more on the way. Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA), and AT&T's (NYSE:T) unit WarnerMedia all are launching major efforts within the next 12 months.But many of the existing services -- and possibly one or two of the larger offerings out there -- are going to go by the wayside at some point. The glut of so-called virtual multi-channel video programming distributors like YouTube TV, Sling, DIRECTV NOW and others will ease.Roku's potential base of advertising customers, in particular, is likely to peak in the next 12-18 months. A less-fragmented streaming universe would give more power back to the winners -- and lower overall demand and pricing power for Roku.From a broad standpoint, there are simply a lot of questions here. Roku certainly is going to grow going forward. This is not the next TiVo (NASDAQ:TIVO). But, again, this is a stock selling at 20x its key revenue stream -- and something like 400x 2019 adjusted EBITDA.It's a valuation that leaves little room for questions. And it's a valuation that is likely to recede if, at some point, those questions are raised.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Why the Roku Stock Price Needs to Pull Back appeared first on InvestorPlace.
- InvestorPlace
How Snap Stock Can Get Where It Needs to Go
I'll admit it: I've gotten Snap (NYSE:SNAP) wrong. I've spent much of this year arguing that Snap (or, as some still refer to it, Snapchat) shares have moved too far and that the SNAP stock price was too high. So far, that cautiousness has proven foolish.Source: ArthurStock / Shutterstock.com Indeed, SNAP stock has nearly tripled so far this year. Among nearly 700 stocks with a market capitalization over $10 billion, only Roku (NASDAQ:ROKU) and Sea Limited (NYSE:SE) have done better.That performance, however, includes a bit of a pullback of late. Despite a blowout Q2 report last month, the SNAP stock price has fallen roughly 10% from post-earnings highs. There may be some profit-taking after the big gains. And with even analysts turning bullish, it could be that, at least in the near term, SNAP is running low on potential buyers.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAnd there are still valuation concerns. SNAP remains unprofitable. It's one of many high-flyers that could get dinged in another market swoon. There's still a lot of work for Snap to do to support even the current valuation. * 10 Undervalued Stocks With Breakout Potential All that said, first-half earnings show that there's a real path for Snapchat stock to keep its elevated levels. Also, it could potentially move higher. At this point, an investor's opinion on SNAP comes down to whether he or she believes it can move down that path. Incremental Margins and the SNAP Stock PriceOne of the concerns with SNAP stock is that its margins might not be quite as good as those of social media rivals like Twitter (NYSE:TWTR) or Facebook (NASDAQ:FB). Incremental usage on, say, Facebook costs the provider almost nothing. For Snapchat, a messaging app, the costs are higher, if still modest.Indeed, Snap's gross margins were negative as recently as 2016. But first-half results show real progress in moving toward profitability when looking at the company's incremental margins. Incremental margins are the profitability shown on each additional dollar in revenue. For Snap in 2019, they've been very strong.In fact, in the first quarter, they were over 100%. Revenue increased $89.8 million year-over-year; adjusted EBITDA increased by $94.4 million. That type of improvement probably is unsustainable, but even second quarter results were strong. Incremental margins (again, on an EBITDA basis) in Q2 were 72%. How Much Revenue Does Snap Inc Need?Over the past four quarters, Snap Inc has posted an adjusted EBITDA loss of $391 million. Assuming 70% incremental margins, it would need another roughly $560 million in revenue to break even on an EBITDA basis.That's still a lot of growth: revenue over the past year has been roughly $1.4 billion. That figure, then, probably needs to increase about 40% for Snap Inc simply to get back to zero. Of course, Snap posted revenue growth of 39% in Q1 and 48% in Q2, meaning the company should get to positive adjusted EBITDA by Q2 or Q3 of 2020.That said, near zero EBITDA doesn't support what remains a $22 billion market capitalization. To get to that point, Snap probably needs to get to at least $750 million in EBITDA, using Twitter's approximately 30-times multiple. That requires at least another $1 billion in revenue.Looked at another way, Snap's revenue needs to at least double just to get the company to the point where it can support a stock price of $16 on an EV/EBITDA basis. And so, anyone buying Snapchat stock here needs to believe that the top line can roughly triple in the next few years. That seems like a big ask. How Snapchat ImprovesThat said, it's certainly doable. 200% revenue growth in five years would require a roughly 25% annual growth rate. Snap has grown revenue 43% year-over-year for the past six quarters. And it has tools to keep that growth intact.Notably, Snap has tremendous room for improvement in monetizing its users. An analyst noted in April that its monetization was one-third that of Twitter and one-fifth that of Facebook.One way to do that is by getting more advertisers. Chief Business Officer Jeremi Gorman made exactly that point on the Q2 conference call:We believe the single biggest driver for our revenue in the short to medium term will be increasing the number of active advertisers using Snapchat. We have significant headroom in our business, given high levels of user engagement and ample supply of available impressions.In other words, Snapchat has plenty of inventory to sell to advertisers. The issue, at least per management, isn't necessarily user growth, which had flatlined before an impressive Q2 jump. Rather, Snap has to find those advertisers.And it's making progress doing so. ARPU (average revenue per user) has steadily increased at least 37% in each of the last four quarters. Yet Snap still has minimal monetization, particularly overseas. The company generates barely $1 in quarterly revenue per user outside of North America. That's almost 60% of its user base. The Case for SNAPIf Snap Inc can triple revenue in the next five years, Snapchat stock likely rises over that stretch. To get there, it needs to get more advertisers. To beat that mark, it needs user growth as well.And so, the case for SNAP stock comes down to largely those two aspects. Can the company better compete with Facebook, Twitter and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) for online advertising dollars? And can it drive user growth, particularly where it's struggled outside of the age 13 to 34 demographic?In December, investors largely thought the answer to both of those questions was "no." Now, they're more confident. But there's still more upside ahead if Snap Inc can deliver on both fronts.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post How Snap Stock Can Get Where It Needs to Go appeared first on InvestorPlace.
- GuruFocus.com
Snap Inc (SNAP) CFO Derek Andersen Sold $553,811 of Shares
CFO of Snap Inc (30-Year Financial, Insider Trades) Derek Andersen (insider trades) sold 34,570 shares of SNAP on 08/19/2019 at an average price of $16.02 a share. Continue reading...
- Investor's Business Daily
Is Snap Stock A Buy Right Now? Here's What Earnings, Charts Show
Snap stock has recovered sharply from a steep decline that began the day after its initial public offering in 2017. A series of product upgrades and features is driving new growth.
- InvestorPlace
Major Headlines Mean Opportunities for Smart Investors
Well, here we are halfway through National Sandwich Month. It is also Get Ready for Kindergarten Month and National Peach Month, in case you were wondering.Source: Shutterstock And don't get me started on days. I'm sure you're beyond disappointed to know that we missed National Sneak Some Zucchini Into Your Neighbor's Porch Day on August 8. Or National I LOVE My Feet Day! on August 17.I mean, who comes up with these? Clearly people with too much time on their hands.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI have one addition -- National Crazy Market Week. Let's talk about that before moving on to a real national day that actually does have value for us as investors. National Crazy Market WeekLast week was full of major headlines ranging from big earnings releases to the trade issues with China to the flashing of a recession indicator. The media really ran with the latter headline as the bears came out of hibernation.The indicator that caused the recession fears was an inverted yield curve. This occurs when the 2-Year U.S. Treasury bond yield is higher than the yield on the 10-Year bond. That means the government is paying more to people who lend to the country for two years than those who lend for ten years. That's the reverse of what it should be. In a normal yield curve, the longer the maturity of a bond, the higher the yield. This makes sense because bond owners should be paid more for locking their money up for longer periods of time.When the 2/10 yield curve inverts, it historically has been a precursor for a recession. However, it really isn't that black and white if you do the research.Since 1978, when an inversion occurs a recession typically doesn't happen for 21.3 months - nearly two years. Even more surprising to most is that one year after the inversion, the stock market is almost always higher… and by a big margin! Over the last four decades, the stock market was up 20%+ on average one year after the 2/10 yield curve inverts.And when you add in the fact that the Fed will likely lower interest rates a couple more times before the end of this year, the odds become even greater that stocks are poised for a major rally in 2020.Yet again, this is a case of the media telling you only half the story. And it makes it a buying opportunity for smart investors.If you're interested in learning more about my thoughts on the current market environment -- and get a few bonus stock picks at the same time - check out my recent appearance on Yahoo Finance by clicking here. National CBD Day!August 8, was National CBD Day. This celebration makes sense to me because of the rapid growth in CBD availability after hemp became legal last December. The CBD industry is set to explode nearly 40X in just four years. Those opportunities just don't come along very often.One company I've followed for years celebrated that day in style. GW Pharmaceuticals (NASDAQ:GWPH), the manufacturer of the first FDA-approved, CBD-based drug, hit a monthly high.The company announced unbelievable revenue growth of 2,081% in its second-quarter report. Most of that came from Epidiolex, the drug I mentioned above. It brought in sales of $68.4 million in the quarter and $101.9 million through the first six months of 2019. Those figures blew estimates out of the water. The Hemp Business Journal had expected full-year sales of Epidiolex to come in around $65 million.Approximately 12,000 patients have received Epidiolex prescriptions since its launch, and that number is only estimated to continue growing. If the drug's approval is expanded to treat tuberous sclerosis complex -- Phase 3 trials are underway and have been promising so far -- its potential client base could increase by another 50,000.This is only the beginning of CBD. I've said it before and I'll say it again … if CBD were a drug, we would call it a wonder drug. So it's no wonder that the CBD industry is set to experience a huge boom over the next decade. I am not aware of any other industry that has this kind of potential. Third Time's the Charm?Snap (NYSE:SNAP) is giving smart glasses another shot. Earlier this week the company unveiled its third iteration of Spectacles, which have the ability to record video and take pictures in 3D. This latest version will also provide the ability to apply augmented reality effects to the images and videos -- similar to what Snapchat does on our phones.Spectacles 3 will be released this fall, so there's your holiday gift for the person who has everything. They come in two colors, are made of stainless steel (an upgrade from previous plastic models), and cost $380.Augmented reality -- and its close cousin virtual reality -- isn't just about adding cool special effects to pictures. The technology can be used in everything from retail to industrial training to professional and amateur sports. That means there will be a whole lot of winners in this space, and you can be sure I'm keeping a close eye on all of them. Bye-Bye Hybrid VehiclesThe shift toward the future of transportation just took another step forward. General Motors (NYSE:GM) and Volkswagen (OTCMKTS:VWAGY) have announced that they will no longer manufacture hybrid vehicles that run on both gas and electricity. They are going to focus their investments on fully electric cars.In the next four years, General Motors plans to launch 20 electric vehicle (EV) models. And Volkswagen is looking to debut a small plug-in SUV next year in the U.S. and an electric version of its minibus by 2022.I think General Motors President Mark Reuss summed the decision up the best: "If I had a dollar to invest, would I spend it on a hybrid? Or would I spend it on the answer that we all know is going to happen, and get there faster and better than anybody else?"The exact same thinking applies to investing. Invest in what's going to happen, and get there faster and better than anyone else. That's how you make the big money.While other auto manufacturers still plan to maintain their investments in hybrid vehicles along the road toward battery-powered cars, we are now seeing the beginning of what I expect will be a new world of transportation. In fact, Continental AG, one of the largest car-parts makers in the world, announced last week that it would cut its investments in conventional engine parts.Transportation 2.0 is coming, from EVs to AVs (autonomous vehicles). This revolution wouldn't be possible without the next generation of batteries. So naturally, the auto manufacturers want a piece of that pie.Last week, Musashi Seimitsu Industry, a Japanese auto maker, announced a partnership with KeraCel, a battery developer that claims to have created a solid state battery with twice as much energy as lithium-ion batteries that will only cost half as much. Plus, these batteries will be 3D printed, which means they can be manufactured in any shape and in any size -- so they can be used for anything!These potential new batteries are amazing and fit squarely in a couple of big investment themes. And for early investors, they present the kind of moneymaking opportunity that could turn a tiny initial stake into an absolute fortune.Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you're interested in making triple-digit gains from the world's biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Major Headlines Mean Opportunities for Smart Investors appeared first on InvestorPlace.
- InvestorPlace
Social Ads Not the Only Risk to HEXO Stock
At the end of July, a short seller went after Hexo Corp. (NYSE:HEXO) -- and the market yawned. In fact, the HEXO stock price bottomed the Friday before, gained 9% the day of the report, and even with a pullback is up over 11% since the session before its release.Source: Shutterstock The market's lack of response isn't terribly surprising. Short sellers have had a few high-profile misses of late. In late 2017, Citron Research infamously compared Shopify (NYSE:SHOP) to Herbalife (NYSE:HLF); SHOP stock has tripled since then. * 10 Stocks Under $5 to Buy for Fall Closer to home, in December Quintessential Capital Management alleged self-dealing at fellow cannabis producer Aphria (NYSE:APHA). Quintessential made some good points: Aphria took a C$50 million impairment on acquired assets barely four months later. APHA stock lost half its value after the release, then promptly rose 150% before fading along with other cannabis plays.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo there are some reasons why investors might see this bear raid, too, as much ado about nothing. And in terms of the most widely-covered allegation, it may be. But the report does highlight some potential risks to HEXO stock -- risks that investors would be wise to at least keep in mind going forward. The Snapchat Risk to Hexo StockThe primary allegation from short seller The Friendly Bear is that Hexo's advertising on Snap (NYSE:SNAP) platform Snapchat could violate Health Canada regulations. The Friendly Bear compared Hexo to CannTrust Holdings (NYSE:CTST), whose stock plunged after illegal grow rooms put its production license at risk.The argument is intriguing, if a little thin. Health Canada regulations prohibit advertising of any kind to minors (those under 18, the federal minimum age for cannabis purchase in the country, though most provinces set the age at 19). Snapchat, of course, sees heavy usage among teenagers.But, as The Friendly Bear points out, the regulator also forbids advertising that associates the brand with "glamour, recreation, excitement, vitality, risk or daring." An ad captioned "A Fresh Spark" may well fit that bill. Both issues are amplified by the fact that Health Canada, in March, emphasized both the promotional nature of some online advertising and pointed to concerns about social media ads being seen by customers who were not of age.In a statement to Bloomberg, Hexo refuted the report. It noted that it doesn't run campaigns in its home province of Quebec, where regulations are more stringent. And it said its agreement with Snapchat ensures ads reach only adults.That response seems to have satisfied investors. And perhaps with good reason. The regulations are stringent, and perhaps somewhat vague. Even if Health Canada determined that the ads were in violation, one imagines Hexo would be able to pull or revise its advertising. Comparing Hexo to CannTrust, in particular, seems like a potential bridge too far. Two More Risks to the HEXO Stock PriceThat said, the report also contained two other intriguing facts that didn't seem to gain as much attention. First, the author highlighted a potential risk to Hexo's relative dominance in Quebec. The company owns about 30% share in that key market, thanks to a first mover advantage and its physical presence in the province.An agreement with the province ensures guaranteed purchases of 20,000 kilograms in year one, per a Hexo press release from last year. But it's not clear that the guaranteed extends beyond year one, with Hexo itself writing at the time that the agreement was "expected to supply" increased amounts going forward. With competition increasing, the expected growth in demand may not materialize.The second source of potential pressure comes from a recent regulatory measure. Quebec already has banned the sale of candies, in an effort to protect minors. Federal regulations on edibles appear to be much the same, ahead of the expected launch of those products near the end of this year.That's a potential issue for Hexo in Quebec and beyond. After all, Hexo itself is focused on becoming, as it terms it, "the premier branded 'ingredients for food' cannabis company." If regulations compress the edible market, Hexo, more than other cannabis plays, would suffer. Patience May Be Wise With HEXO StockNone of this is to say that investors should have sent the HEXO stock price tumbling -- or that Hexo stock is a short. I wrote last month that HEXO would be an intriguing buy at some point. The stock has returned to similar levels, but I'm still somewhat loath to rush in.The focus on edibles is wise for a smaller producer -- but that catalyst remains likely six months away. Cannabis stocks continue to struggle, with even Aphria's blowout earnings report not enough to spark a sector-wide rally.And Hexo Corp. doesn't have a lot of room for error. It remains reliant on Quebec. It will remain reliant on edibles going forward. If either of those two markets is smaller than hoped, Hexo's growth slows. And a market cap still over $1 billion (including the effect of warrants) may well come down. The HEXO stock price may be cheaper, but that's not the same as it being cheap.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Social Ads Not the Only Risk to HEXO Stock appeared first on InvestorPlace.
- Financial Times
Beware the dead hand of the controlling founder
Adam Neumann, co-founder and chief executive, is — in the words of the document — a “unique leader who has proven he can simultaneously wear the hats of visionary, operator and innovator, while thriving as a community and culture creator”. Mr Neumann will choose who inherits his super stock. Investors’ current willingness to sacrifice voting rights for a stake in fast-growing, newly listed companies will help him realise these goals.
- TechCrunch
Week in Review: Snapchat beats a dead horse
This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on TechCrunch this week to surface my favorites for your reading pleasure. Snap's latest version of Spectacles were announced in Vogue this week, they are much more expensive at $380 and their main feature is that they have two cameras which capture images in light depth which can lead to these cute little 3D boomerangs. The $150 Spectacles 2 are still for sale, though they seem quite a bit dated-looking at this point.
- InvestorPlace
Weibo Stock Is Still a Risky Play
Weibo (NASDAQ:WB) stock reports its earnings Monday before the bell. The China-based social networking company has suffered in recent months as both the trade war and a weak revenue outlook decimated Weibo stock. The equity has continued to fall as geopolitical events weigh on most Chinese stocks.Source: testing / Shutterstock.com Although WB stock shows a great deal of potential, investors face too much risk by buying this equity approaching earnings. WB's Last Earnings Report Will Affect the Current OneAnalysts forecast WB stock earnings of 59 cents per share. This would represent a 13.2% drop from the same quarter last year when the company reported 68 cents per share in profits. They also predict revenues of $429.3 million. The company reported $426.6 million in the year-ago quarter.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, the revenue outlook for the second quarter hammered WB stock in May. The company announced a revenue outlook for the second quarter of $427 million-$437 million. This came in well below expectations. Up until then, Wall Street had expected second-quarter revenues of $481.8 million, as Regina Borsellino reported. That partially explains why WB stock has lost almost half of its value in the past four months. * 10 Cheap Dividend Stocks to Load Up On As the equivalent of Twitter (NYSE:TWTR) in China, Weibo has seen rapid subscriber growth. However, the company has struggled to monetize that growth. Weibo stock has also become caught up in the selling of Chinese stocks related to the U.S.-China trade war, despite the fact that it does not have direct exposure to the U.S. What WB Stock NeedsAs the company reports earnings, it still finds itself in need of a catalyst that will stem the decline. Weibo beat earnings estimates over the last four quarters. However, traders will want to see some indications that a massive revenue miss will not occur again.WB investors also need signs that the company will follow in the footsteps of its U.S. counterparts on better monetizing the site. Gaining traction with ads rescued both Twitter and Snap (NYSE:SNAP) in recent quarters. Weibo's investors want to see the same.Investors may have good reason to buy WB stock once the trade war abates. Weibo currently trades at a forward price-to-earnings ratio of 11.8. It has suffered a slight earnings slowdown this year. However, Wall Street forecasts earnings growth of 17.2% in fiscal 2020. They also expect annual profit increases to average in the double-digits over the next five years.To a degree, all Chinese stocks trade at a discount. This is due to investors having to buy Cayman Islands-based holding companies that represent firms in China. Still, I think the low forward P/E ratio prices in both that risk and the concerns over the trade war. The Bottom Line on Weibo StockDespite the low price, I would not buy WB stock before it announces earnings. Investors look into the future, so as long as earnings exceed expectations, I see no issues with the temporarily lower profits.However, traders also likely feel the sting of the much lower revenue outlook that came in the last earnings report. Weibo needs to avoid further surprises here. Moreover, the continued intensity of the trade war continues to spook investors. Fears that China will invade Hong Kong also have investors on edge. Chinese equities such as WB stock will feel the pain of such geopolitical actions whether or not they relate to the business.However, once the trade war ends, investors will probably see WB stock as an equity with a low P/E ratio registering double-digit profit growth. That makes for a promising outlook, eventually.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Weibo Stock Is Still a Risky Play appeared first on InvestorPlace.
- InvestorPlace
With Spectacle 3, Snap Stock Is All Set for Another Major Failure
There is no question that Snap (NYSE:SNAP) CEO and co-founder Evan Spiegel is sitting in a better position eight months into 2019. SNAP stock is up 197% year to date through August 14.Source: Shutterstock More than that, the company just issued $1.1 billion in convertible notes at the bargain-basement interest rate of 0.75%. As my InvestorPlace colleague James Brumley recently admitted, "Snap CEO Evan Spiegel has become a savvy CEO rather quickly, making SNAP stock the compelling prospect it was supposed to be two years ago (but wasn't)." When Snap went public in 2017, I wasn't a fan. Two years later, I've found myself predicting that SNAP stock will hit $20 by the end of the year. InvestorPlace - Stock Market News, Stock Advice & Trading TipsSpiegel has done an excellent job focusing the company on monetizing its social media app while at the same time cutting expenses. Don't get me wrong, I'm not thrilled that it lost $202 million on an EBITDA basis in the first six months of the year, but revenues continue to grow at a significant rate while free cash flow usage is diminishing. * 10 Stocks Under $5 to Buy for Fall The business is getting stronger in almost every way possible, including the ever-important daily active users, which have jumped 8% over the past 12 months to 203 million. Take a bow, Evan Spiegel. Thanks to your efforts over the past year, your net worth has risen exponentially. A Loss of FocusA piece of earth-shattering news came across the wires August 13. Team Snap announced the launch of Spectacles 3, the third version of its costly Spectacles sunglasses that capture the world in 3D. Available for pre-order at $380; they'll begin shipping the sunglasses in the fall. Remember that focus I was talking about in the intro. The development of Spectacles is the antithesis of focus. While innovation is to be applauded, Spectacles isn't the kind of creativity that will reward Snap shareholders. Not now, not ever. "Grossly overestimating demand for Spectacles in 2016, Snap was forced to take a $40 million write-down on all the first-generation units it couldn't sell… which was most of them," Brumley wrote in November 2018. Here's what I said about Spectacles in September 2018:"I wish Snap would forget about those ridiculous Spectacles. While the second generation might look a lot better, they're nothing but a distraction from its real business of selling advertising."The crazy thing about the third version is that it's almost double the price of the second. Sure, Spectacles 3 comes equipped with a second HD camera, but who in their right mind is going to pay that kind of price for two HD cameras? Perhaps the price increase is meant to ensure the company makes money on each pair sold, but something tells me this fascination with sunglasses is going to end with another writedown. It's All About Making MoneyI can understand Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) making this kind of crazy bet on 3D sunglasses. It generated $27.4 billion in free cash flow over the past 12 months; it's got an entire division dedicated to moonshots that aren't likely to pan out. Snap's free cash flow usage over the trailing 12 months ended Q2 2019 is $489 million, down considerably from $914 million a year earlier. It's reduced its free cash flow usage for four straight quarters, so it's going in the right direction. However, I fail to see how Spectacles 3 is going to help reduce that number even further. Until it's generating positive free cash flow, investors ought to be suspicious of vanity projects such as this one. They're a waste of time, resources and focus. While I still believe Snap stock could still hit $20 in 2019, the company's insistence on maintaining the Spectacles business portends a potential correction in 2020.If you're considering money-losing social media, I continue to prefer Pinterest (NYSE:PINS) over SNAP stock because it's got a better pathway to profitability. And most importantly, it's unlikely to make a spectacle of itself.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post With Spectacle 3, Snap Stock Is All Set for Another Major Failure appeared first on InvestorPlace.
- American City Business Journals
WeWork joins underperforming Uber, Lyft, Nio as biggest pre-IPO cash guzzlers
All 10 companies on this list of the biggest pre-IPO cash guzzlers are either trading below their first day offering price or are out of business.
- Motley Fool
Don't Sleep on Snapchat's Augmented Reality Ambitions
A $1 billion capital raise could be the spark that makes Snapchat a big player in AR.
- Financial Times
WeWork tests tolerance for its ‘gov-lite’ structure
WeWork is facing a chorus of corporate governance concerns after disclosing details of co-founder Adam Neumann’s share sales, transactions with the company and plan to retain control after it goes public. published by the US office space provider on Wednesday added a string of questions about Mr Neumann’s outsized influence over the company to the debate about its ability to reverse a record of steep losses.
- Motley Fool
11 Things We Just Learned About the WeWork IPO
Here are the key facts investors need to know from The We Company's latest S-1 filing and what the office-sharing juggernaut hopes to do.
- Motley Fool
Snap Refuses to Read the Room and Launches Spectacles 3
But going against the grain could help Snap Spectacles 3 establish a toehold in the smartglasses market.
- Market Realist
Can Snap’s Spectacles 3 Win the Hearts of Snapchat Users?
Snap's photo and video sharing app, Snapchat, announced its new Spectacles 3 glasses on August 13. Spectacles 3 are Snap’s latest smart glasses.
- Bloomberg
How the End of Growth Could Save China Internet Stocks
(Bloomberg Opinion) -- It’s time for Chinese internet executives to embrace the slowdown.Heady days of 50% sales growth are over, which means they needn’t keep burning marketing money to chase revenue that isn’t there. Part of this slowdown is due to both Chinese and global economic weakness, yet much of it was the inevitable conclusion to a long and lucrative boom in the world’s hottest industry. The sooner management accepts this new reality, the sooner they can start delivering stable earnings growth. Investors have already shown impatience. The CSI Global China Internet index – a collection of 30 companies that includes Alibaba Group Holding Ltd. and Tencent Holdings Ltd. as well as lesser-known Mango Excellent Media Co. – has dropped 22% over the past year. By contrast, the Dow Jones Internet Composite Index, which tracks the likes of Amazon.com Inc. and Snap Inc., is off just 2%. A quick look at revenue for these Chinese companies tells the tale. As recently as a year ago, top-line growth surpassed 50% across the industry, spurred by massive rises at Alibaba and Xiaomi Corp. On a more balanced basis, the median growth rate was 10 to 15 basis points slower, which is still significant.And yet operating income fell far behind, dropping into a decline on a weighted basis with median growth rates in the single digits. I’ve warned about this disconnect between revenue growth and profits. The problem has been that management, and investors, became so obsessed with the top line that they lost sight of the bottom. Which is why companies spent big on marketing to ensure revenue numbers kept hitting those heady heights.The result was a negative correlation between revenue growth and operating income expansion. That’s not the way it should be. Companies should reap the rewards for selling more of their wares, not suffer for it.Now there are signs that this obsession with growth may be coming to an end. After more than a year of using marketing dollars to juice revenue, some of the more savvy management teams have reined in spending. They’re pragmatic enough to recognize that in this new, more sedate era there’s a limit to how much they can gain from chasing users.We’re in the early phases of the June-quarter earnings season, but there are already encouraging signs. NetEase Inc., the online games and content company, cut its sales and marketing budget by 22% after reducing it by 32% the prior quarter. The result is that while revenue climbed only 15%, operating profit expanded 49%. The stock was rewarded with a 13% rise over the following two days.China Literature Ltd., a provider of e-books and online publishing, by contrast reaped little reward from an 85% increase in marketing expenses for the first half, posting revenue growth of just 30% and a 15% drop in operating income. The company showed weakness in its paid-reading business while its free model has yet to be fully monetized, analyst Wei Ming of China International Capital Corp. wrote Tuesday, noting that the company faces continuing regulatory headwinds. Investors saw the folly in spending big on marketing when there are limits to driving revenue, sending the stock down as much as 19% in Hong Kong.Both Alibaba and Tencent will report earnings in coming days. Investors have come to understand that revenue growth isn’t what it used to be. If management embraces this new normal, then shares may enjoy the rewards of fiscal discipline. To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Benzinga
SunTrust: Internet Stocks Outperforming S&P 500
Internet stocks are outperforming the broader market, SunTrust Robinson Humphrey said in a review of second-quarter earnings season. Top-Line Momentum Strong The number of companies reporting revenue ...
- TechCrunch
Daily Crunch: Verizon is selling Tumblr
The Daily Crunch is TechCrunch's roundup of our biggest and most important stories. It's been six years since Yahoo acquired the popular blogging platform for more than $1 billion. Despite previous reports indicating the on-demand delivery company is seeking an M&A exit, sources close to the matter say Postmates is on track to complete an initial public offering this year.
- Motley Fool
Snap Takes a Third Shot at Spectacles
The new version costs $380 and ships later this year.
- American City Business Journals
Snap unveils Spectacles 3 with 2 cameras to record in 3D
The Silicon Beach company is also introducing a suite of new 3D effects on its flagship platform Snapchat for use with Snaps captured by the new sunglasses.
- Reuters
UPDATE 1-Snap, in augmented reality push, launches new Spectacles version
Snap Inc said Tuesday it will launch a new version of its Spectacles sunglasses that will have the capability of capturing photos and videos and uploading them directly to its unit Snapchat. Snap has struggled to make money from its Spectacles business, and wrote down $40 million in unsold glasses in 2017. Production will be smaller for its new Spectacles 3 version, allowing Snap to continue experimenting with augmented reality, a key focus for the technology company.
- Bloomberg
Snap Finally Sees the Light on the Price of Its Spectacles
(Bloomberg Opinion) -- It took three years, but Snap Inc. has finally worked out a wise pricing strategy for its Spectacles smartglasses, which incorporate an embedded camera to record short video clips.That’s not just because the new sticker price of $380 for the third generation of glasses, announced Tuesday, will let the social network milk a healthier gross margin from each pair than the previous two versions, which were were priced at $130 and $150 respectively. The higher price point could also counterintuitively help Snap sell Spectacles in more stores.It can be hard to persuade people to buy sunglasses they can’t try on, so an in-store presence is essential. Since Snap introduced Spectacles in 2016, the company has struggled to persuade eyewear distributors to stock them because of their cost, which competed with non-smartglass offerings. The low price also made it harder for the smartglass industry as a whole by making consumers accustomed to cheaper products.Consider EssilorLuxottica SA, the French-Italian firm that dominates the U.S. eyewear market — Jefferies analysts estimate its share of the global market is 30%. It owns Ray-Ban, Oakley, LensCrafters, Sunglass Hut, Persol, Sears Optical and many other brands. Although the company’s business is vertically integrated — it makes the lenses and frames and then sells them in its own stores — it doesn’t have a major smartglass offering.That might have created an opening for Snap to persuade the firm to stock its Spectacles, which are made by the Chinese contract manufacturer Goertek Inc. The problem was that they were sold more or less at cost, meaning there was little scope for the retailer to make a profit. What’s more, at $130, they undercut Ray-Ban’s own Wayfarer Classics, which cost $153, but with more functionality.. Those glasses helped EssilorLuxottica deliver a 63% gross profit margin last year. The Charenton-le-Pont, France-based firm would have cannibalized its own sales for no profit. By lifting the price to $380, Snap will not only do more to cover its own costs but make it more attractive for third parties to sell the glasses in their stores. And by making them limited edition, Snap is less likely to risk a repeat of the $40 million writedown for unsold inventory it had to take in 2017.Whether the glasses are priced attractively enough to draw consumers is a different issue. But getting the glasses into stores will only help bolster their revenue, which was “not material” to earnings in the second quarter. Snap CEO Evan Spiegel should have opted for a higher price from the outset.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- CNET
A new Spectacles is coming, Sega Genesis Mini first take
This week's major tech headlines include a new version of Snapchat's Spectacles, a new scammer warning for TikTok users and a first take of the Sega Genesis Mini.
